A Venture Capital Fund Gains a Foothold in Silicon Valley

01

Overview

A group of former managing directors of a large network of seasoned angel investors were preparing to set up a micro venture capital (VC) fund, with $5 million available for investing in early-stage technology companies based in Silicon Valley. This was a challenging task and they needed to clearly understand the emerging trends in the start-up ecosystem.


02

Challenge

Our client was faced with a daunting task and our assistance was called upon to identify and categorise the types of start-ups and sectors that would be most appealing to successful investors in the region. As non-American investors with limited experience in Silicon Valley, our client needed to make highly informed decisions to reduce their exposure to risk when entering this intensely competitive environment.


03

Solution

We initially discussed the size and dynamics of the market in Silicon Valley and created a list of accomplished micro VCs in the United States. Our team also interviewed a number of US-based entrepreneurs to understand their expectations and concerns about working with foreign investors.

More importantly, we analysed 4,430 investment rounds that took place in Silicon Valley since 2012 and that involved similar sized VCs. Our consultants focused on angel, seed and venture funding specifically and examined nearly 40 sectors while investigating the investment rounds. We used this information to determine the future outlook of the market and compiled a comprehensive spreadsheet and index pinpointing the most promising and dynamic sectors for investment.

Our consultants also examined the investment strategies and portfolios of the most promising American micro VCs. Based on these findings we listed our suggestions to help move our client’s business in a better direction. This micro VC started its investments within a couple of months of the project's completion. Using our insights, the client was in a position to make more intelligent decisions and opted to focus on four of our recommended start-up sectors.

38

SECTORS INVESTIGATED TO IDENTIFY TRENDS

4430

INVESTMENT ROUNDS ANALYSED

"We are pleased to work with First Step Consulting. They have provided us with a great deal of information about local investors and early stage ventures in the Bay Area. Their work was instrumental in developing our overall investment strategy."

— Managing Partner, VC Fund

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